LTC Insurance Shared Benefits:

Why shared care benefits
are a critically-important feature
for couples to consider including
​in their long-term care insurance

"Shared Care" or "Shared Benefits" is an optional feature in Long-Term Care (LTC) insurance that allows couples who both purchase policies to access one another’s benefits and thereby extend the maximum coverage provided by either policy.  Most of the major insurers that market "traditional" LTC insurance today offer Shared Benefits.

Typically, LTC insurance with Shared Benefits requires that both spouses or partners purchase a policy with identical policy features.  The addition of a Shared Benefits rider allows either person to access the benefits in the other’s policy if that person exhausts his or her own policy benefits.  Upon the death of one spouse/partner, the combined remaining benefits of both policies are transferred to the surviving partner (whose subsequent premium is reduced to their individual policy premium less the cost of the Shared Care Rider.)*
​
Alternatively, some Shared Care Riders may instead offer a third “shared” pool of benefits. In this design, both partners have access to this “middle” pool. If one partner dies with remaining benefits left in the “third middle shared” pool, these benefits are inherited by the surviving partner.

For couples, the potential for a significant financial crisis invariably arises when the first member needs care, as this person can spend through assets that are needed for a surviving spouse.  This is particularly true if the healthy spouse outlives the one in need of care for several to many years, as the resources needed to secure his or her standard of living have been spent on the first partner’s care.

Shared Care helps protect the financial assets and lifestyle of the healthy spouse by creating a common financial resource from two separate policies. This feature roughly doubles the maximum benefits payable on either policy.  It is, in short, the most flexible and cost effective way to protect both the healthy spouse and the one in need of care.

* Variations in this design typically involve a limitation in how much of a surviving spouse’s benefits may be used (most, but not all, allow access to 100% of the other policy’s benefits) and how the Shared Care rider interacts with other policy provisions. Some insurers also allow additional coverage to be purchased by the surviving partner if all of his or her benefits have been used by the other.